Digital Coupons: The Mobile Category

According to a recent post on Mashable.com, most consumers who subscribe to a mobile plan from a carrier own a smartphone. In fact, it was way back in March 2012 when the smartphone became the dominant mobile device in the U.S.

As a result, retailers, merchants, CPG manufacturers are investing heavily in mobile advertising and promotions. According to figures posted by the CTIA, the trade association representing the wireless industry, the amount spent on mobile marketing was $1.2 billion from Jan-June 2012, which was almost double the $7.7 billion for the same period in 2011.

Following on decades of stagnation in which the U.S. mobile internet segment lagged significantly behind Europe and Asia, with this accelerated growth, the coupon and promotional companies and vendors that serve the c-store industry are starting to evolve rather rapidly to take advantage. Things seem almost chaotic right now; with manufactures’ paper coupons and simple loyalty programs that have been the standard for six decades being replaced in the last two or three years with everything from chain-specific mobile apps integrated with users bank accounts to tying mobile coupon delivery to smartphone users according to customers’ preferences and buying habits in real-time, with direct relation all the way down to individual users locations’ in different cities, regions, and times of day.

Things move fast, so to help make some sense we spoke with Catherine Tabor, CEO of Sparkfly, and Atlanta-based digital promotion technology company that provides patented solutions to marketers, POS providers and retailers to help implement multi-channel mobile marketing strategies that can track the ROI from offer to in-store purchase.

Dave Hochman:In your view, what are the top 2-3 technology trends or opportunities that are causing retail chains (especially c-stores) to adjust their coupon strategies?

Catherine Tabor: The big opportunity for c-stores lies with the adoption of real-time POS-based offer management platforms that can track offer redemptions by individual – right down to the item level. Mobile technology implemented at the POS level allows c-store operators to tap into these brand/consumer relationships with digitally delivered promotional offers that can drive foot traffic and sales in their stores.

Especially in the c-store space, we see huge opportunities for retailers and brands with location and proximity technologies that present the right offer that drives a consumer into the store (e.g., weather related coffee offer or lunch time food/drink special offer) or when in the store, presents the consumer with a promotional offer based on their interaction in a specific area of the store, e.g., “I am getting a fountain drink and I get an alert for a drink/hot dog special offer.”

DH:Loyalty-card programs are already a significant driver of revenue for the c-store and gas station segment; can you highlight some ways in which retailers can benefit from linking digital coupons to their loyalty-card programs?

CT: Retailers actually use digital couponing to drive costumers into loyalty programs of all types. For example, when redeemed at checkout, the consumer is presented with a follow-on message inviting them to join the loyalty program for more special offers. In this way, the loyalty programs grow more rapidly, which increases their overall value.

DH:What are the best methods for delivering personalized offerings (based on data that is collected about individuals¹ shopping habits choices) without being intrusive?

CT: Retailers and brands need to ensure that the offers are well-targeted and relevant, and it all starts with collecting data on consumers’ coupon usage within each media channel, e.g., Facebook, mobile ads, the retailer’s app, etc. Each channel has its own way of identifying an individual consumer (and using a platform like Sparkfly) each consumer’s coupon redemptions can be tied back to the specific media where the offer was found. Over time, that data can be used to target consumers with more relevant offers similar to those they have redeemed in the past.

DH:Can you describe some of the more creative digital coupon offers you have seen out there?

CT: In general, I like offers where the brand and retailer collaborate with one another. Ideally, the retailer can drive traffic and sales by tapping into brand marketing dollars, and the brand can gain access to that very valuable consumer purchase data along with a better understanding of ROI and effectiveness of their ad spend by channel. Another interesting thing we are seeing more and more of is the “frequency offers” where consumers are encouraged to continue to buy certain items over multiple visits in exchange for discounts or a reward. This approach, again, requires the ability to track individual consumer purchases down to the item level, across store visits.

DH: How can a convenience store use mobile marketing to capitalize on the fact that other than fuel, a large percentage of C-store purchases tend towards “impulse buys”?

CT: First, mobile offers are a great way to get consumers physically INTO the store where those impulses can then take over. Then, using what is referred to as “proximity technology” in-store can create further opportunities to drive awareness of offers and impulse item purchases that increase total basket.

DH:What are some of the key benefits and value-adds for the convenience category retailer when a store makes digital promotions trackable?

CT: Running a promotion or coupon digitally allows brands to participate in ways they otherwise couldn’t, because now we can track item-level purchase detail, collecting real-time purchase data for each individual consumer in a virtually fraud proof manner. Another advantage with digital promotions is realized when both retailers and brands can track offers back to the source media for an end-to-end view of the consumer purchase funnel as I like to say, not path-to-purchase but path through purchase.

Catherine Tabor, a respected thought-leader on the subject of mobile marketing, will be a panelist at the 10th annual Advertising Week in New York City, Sept. 23-27, 2013. Her session is called “Retail Remixed” and features retail innovators discussing the challenges and opportunities for retail in today’s digital world. Joining Catherine on the panel will be Rick Chavez, chief solutions officer, Microsoft Advertising; PlaceWise president John Dee, and John Roswech, chief revenue officer, HookLogic.

Dave Hochman is the founder of DJH Marketing Communications Inc., a PR, Content & Social Media agency. DJH has written about numerous companies in the beverage, C-Store or specialty foods industries. Contact him at [email protected]